Correlation Between Phatra Leasing and INET Leasehold

Can any of the company-specific risk be diversified away by investing in both Phatra Leasing and INET Leasehold at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Phatra Leasing and INET Leasehold into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Phatra Leasing Public and INET Leasehold REIT, you can compare the effects of market volatilities on Phatra Leasing and INET Leasehold and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Phatra Leasing with a short position of INET Leasehold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Phatra Leasing and INET Leasehold.

Diversification Opportunities for Phatra Leasing and INET Leasehold

0.25

Correlation Coefficient

Phatra Leasing  INET Leasehold

Modest diversification

The 3 months correlation between Phatra and INET is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Phatra Leasing Public and INET Leasehold REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INET Leasehold REIT and Phatra Leasing is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Phatra Leasing Public are associated (or correlated) with INET Leasehold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INET Leasehold REIT has no effect on the direction of Phatra Leasing i.e., Phatra Leasing and INET Leasehold go up and down completely randomly.

Pair Corralation between Phatra Leasing and INET Leasehold

Assuming the 90 days horizon Phatra Leasing Public is expected to under-perform the INET Leasehold. In addition to that, Phatra Leasing is 3.15 times more volatile than INET Leasehold REIT. It trades about -0.3 of its total potential returns per unit of risk. INET Leasehold REIT is currently generating about -0.12 per unit of volatility. If you would invest  850.00  in INET Leasehold REIT on September 24, 2024 and sell it today you would lose (10.00) from holding INET Leasehold REIT or give up 1.18% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Phatra Leasing Public  vs.  INET Leasehold REIT

Phatra Leasing Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Phatra Leasing Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's fundamental drivers remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

INET Leasehold REIT

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days INET Leasehold REIT has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, INET Leasehold is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Phatra Leasing and INET Leasehold

The main advantage of trading using opposite Phatra Leasing and INET Leasehold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Phatra Leasing position performs unexpectedly, INET Leasehold can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in INET Leasehold will offset losses from the drop in INET Leasehold's long position.

The idea behind Phatra Leasing Public and INET Leasehold REIT pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.